Companies and Brands
In Win for Nepotism, Revlon's Perelman Promotes Daughter to CEO
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Debra G. Perelman was named president and chief executive officer of troubled cosmetics company Revlon Inc. (NYSE: REV). Her father, Ronald O. Perelman owns, via holding company MacAndrews & Forbes, 84.7% of Revlon’s shares and has controlled the company since 1985. It would seem, across the entire industry, there must be better-qualified candidates.
Ms. Perelman’s claim on the job is that she has worked at MacAndrews & Forbes, and at Revlon, where she is a member of the board. During the past two years of those tenures, Revlon shares dropped 40% to $18. On the news, the stock dropped 5%. It is a wonder Revlon did not look outside for a turnaround expert, which would have given stockholders some hope.
The train wreck of Revlon’s financials continued again in the most recently reported quarter. Revenue dropped 5.7% to $561 million. The company posted a net loss of $90 million. Revlon breaks out its results by segment. In the most recent quarter:
- Revlon brand sales fell 6.0% to $229 million.
- Portfolio Brand sales dropped 8.3% to $135 million. (Portfolio brands are sold primarily to “the mass retail channel, hair and nail salons and professional salon distributors.”)
- Fragrances sales dropped 16.0% to $91 million.
The only success for the quarter was Elizabeth Arden sales, which rose by $106 million.
Other than questions about the new CEO’s qualifications, particularly in light of recent earnings and share price problems, there was Mr. Perelman’s affirmation of his daughter’s credentials and his hope she is the right person for the job:
Revlon is a brand of firsts – the first to match lips and finger tips, the first to be inclusive, the first to develop color stay technology and the first brand to embody women empowerment in the beauty industry. Debbie’s global perspective, financial acumen and holistic approach to brands, consumers and technology will help Revlon reclaim its leadership position. I have always trusted Debbie to bring fresh vision, innovation and success to companies, and I have no doubt she will do the same for Revlon. Debbie’s extensive experience at both MacAndrews & Forbes and Revlon, as well as her track record for innovation and breaking paradigms to compete in today’s digital and consumer-first environment, make her the ideal leader for Revlon. She is thoughtful, team-oriented and decisive, and I can think of no better way to express MacAndrews & Forbes’ support of Revlon and belief in its future than by appointing Debbie to lead the company.
Based on share price, very few people agree.
Revlon shares were last seen trading down 3.7% to $18.15 on Wednesday, in a 52-week trading range of $15.60 to $27.90.
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